Arbutus Biopharma (NASDAQ: ABUS) For some years now, it has owned the rights to a technology that can be used to deliver messenger RNA to a patient’s cells. In January 2019, Modern (NASDAQ: MRNA), whose entire drug platform is based on messenger RNA, filed a petition with the U.S. Patent Office that the small biotech company’s drug delivery patent be declared invalid. Instead, on Thursday, the agency’s Patent Evidence and Appeal Board ruled in Arbutus’s favor.
The ruling is significant since Moderna’s COVID-19 vaccine candidate uses technology that is covered by this patent. The experimental vaccines the company is developing use mRNA to issue instructions to the body’s cells to start making proteins that will trigger a response from the immune system. But a major problem with this method is the question of administering the treatment: how to carry these instructions to the cells of the body. Several years ago, Moderna authorized its delivery technology, the use of lipid nanoparticles, from a small Canadian company called Acuitas. It turns out that that company had licensed its technology from Arbutus Biopharma, and had no rights to sublicense it.
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With the defense of the Arbutus patent, it appears that Moderna may have to pay some royalties to the smaller company. While Arbutus has not yet sued for those royalties, Moderna’s attempt to invalidate the patent was an implicit admission that he knew the patent could cover his delivery system. In 2017, then-Arbutus CEO Mark Murray said: “We have seen no evidence of a Modern delivery system that is free of our intellectual property. Not in their publications, their presentations, or the examples in their patent applications. In our see what they report as theirs seems to be dominated by our intellectual property. “
After the ruling, Arbutus shares soared sharply higher: As of 12:50 p.m. Friday, they rose approximately 102% from their closing price on Wednesday. Meanwhile, Moderna’s shares fell 10%, reducing a few billion of its market capitalization.
